Minimum Wage

As this father’s day coincides with the summer solstice, it is an appropriate time to recall the astonishingly accurate calculation of the circumference of the Earth that was made on this same day more than 22 centuries ago by one of the founding fathers of mathematics and scientific measurement.

Like other Greek astronomers and scholars at the time, Eratosthenes (276-195 B.C.), the head of the famous Library at Alexandria in Ptolemaic Egypt, assumed the Earth was round and revolved around the Sun. From his research, he discovered a fascinating fact: Every year, at noon time on this day (June 21) and no other, the Sun shone directly to the bottom of a deep well in the town of Syene (site of today’s Aswan Dam).

Syene was almost due south of Alexandria, and Eratosthenes estimated distance between the two cities to be 5,014 stadia (or 800 kilometers).

When the Sun was at its zenith in Syene—shining directly down a well and reflecting back up again—Eratosthenes surmised that it must cast a tell-tale shadow in more northern Alexandria. Using the obelisk located in front of the library (or using some other tall, vertical object), he calculated the angle of the Sun to be 7.2 degrees south of its zenith in Alexandria.

Since 7.2 degrees is 7.2 / 360, or one fiftieth of a full circle, Eratosthenes reasoned that the circumference of the Earth must be 50 times the distance made by the curvature of the Earth between the two cities. That worked out to 252,000 stadia, which is within 1 percent of the modern measurement of 40,008 kilometers.

Just as the Sun cannot be directly overhead two distant cities at the same time, it is impossible to think that suddenly doubling the minimum wage in the cities of Saint Louis and Kansas City (with the mayors of both cities strongly supporting legislation to mandate a $15-an-hour minimum wage) will not cast a long and dark shadow over the prospects for future employment in those same core city areas.

The law of supply and demand is as immutable as rules of geometry and the law of gravity. If you make something more expensive, demand for it will decrease. That holds true for lemons, lightbulbs, and labor. By dictating businesses double the pay of the lowest-paid workers, cities that pass such laws are making it less attractive for businesses to hire or to continue to employ inexperienced and unskilled workers.

Here are three entirely predictable consequences of artificially setting the price of low-skilled labor far above the market price. First, it will make sense to substitute capital for labor through increased automation. Second, it will depress earnings and cause businesses to raise prices or cut corners in striving to deliver the best value to their customers. Third, many businesses will consider moving to other locations—with ample opportunity for doing so in surrounding suburbs.

Summer solstice comes but once a year. Doubling the minimum wage would damage job growth in Saint Louis and Kansas City every day of every year. It’s a matter of simple math and logic.

Andrew B. Wilson is Resident Fellow and Senior Writer at the Show-Me Institute, a free-market think tank based in Saint Louis.

Gleanings and observations.

Every liberal knows that poverty breeds crime, although data are unable to show such a correlation, much less causation. This understanding of what is called the root cause of crime was best expressed in one of those Woody Allen flashbacks in which his father is defending the family maid against his mother’s charges that she is a thief, “Of course she steals, she’s poor,” a truism and in this case a call to ignore the maid’s appropriation of the property of a family struggling to remain above the poverty line.

"Why Are So Many Seattle Restaurants Closing Lately?” asks a recent Seattle magazine headline. The Scrapbook is no restaurateur, let alone knowledgeable about the local economy, but we’ll guess it has something to do with the fact that Seattle’s new $15 minimum wage starts phasing in on April 1. However, the first rule of liberals confronting the laws of basic economics is deny, deny, deny.

A poignant notice from the website of Borderland Books, an independent bookstore in San Francisco’s Mission District:

At the beginning of 2014, the future of the business looked, if not rosy, at least stable and very positive. We were not in debt, sales were meeting expenses and even allowing a small profit, and, perhaps most importantly, the staff and procedures at both the bookstore and the cafe were well established and working smoothly.

It turns out Elizabeth Warren, favorite senator of the left, is not only a self-described Cherokee without evidence of Cherokee ancestry, but a self-described consumer -finance expert without evidence of any financial savvy. Joining two of her favorite themes, women’s oppression and the cruel inadequacy of the minimum wage, she wrote this in a “tweetstorm” she cohosted the other day with fellow Democratic senator Kirsten Gillibrand: “2/3 of minimum wage workers are women, but the minimum wage no longer keeps a mom & her baby out of poverty.”

In the midst of the Obama administration's latest push to increase the federal minimum wage from $7.25 to $10.10 an hour, the Bureau of Labor Statistics (BLS) has released an analysis showing the the percentage of hourly workers earning at or below the minimum wage is down to 4.3 percent, or 3.3 million workers.

President Obama talks, talks, talks about jobs. The first 20 minutes of his State of the Union address in January was all about jobs. Immigration reform would “create jobs for everybody,” he said. His energy policy “is creating jobs.” Obama said he’s assigned Vice President Biden to make sure training programs match workers with “good jobs that need to be filled right now.” Last week he described his new budget as “a road map for creating jobs.”

Despite the ongoing crisis in Ukraine, the White House is focused on making the argument for raising the minimum wage. In just a few minutes, Deputy Press Secretary Josh Earnest will be joined on the phone with Governor Malloy of Connecticut, Governor Chafee of Rhode Island, and Governor Shumlin of Vermont to make that case.

Conservatives and the unemployed.

Millions of Americans, glutted with benefits that until now have seemed likely to be renewed and renewed again, have suddenly become devoid of ambition, shed the work ethic, and taken to the couch and the TV remote. Or found a back pain or emotional problem that entitles them to the even higher benefits designed to ameliorate the plight of truly disabled workers.

President Obama called for a minimum wage hike in his State of the Union Address, but to hear Washington state Democrats tell it, wages aren't the main concern: The real problem is the modern American workplace itself. The minimum wage in Washington state is already $9.32 an hour, more than two dollars an hour higher than the current federal minimum wage.

There are better ways to help workers than the minimum wage.

There is a vintage Corvette parked on the street nearby, a 1977 canary yellow model in perfect condition. The NADA Blue Book says it’s worth around $15,000.

The car is someone’s toy: I know that because it hasn’t been moved for an entire year. I’ve seen the owner visit it a couple of times to rev the engine and give it a sponge bath, but it’s been in the exact same spot since last Christmas.

Long-term unemployment is a serious problem. Liberals don’t have an answer. Conservatives can do better.

Democrats on the House Ways and Means Committee wrote a letter on the Tuesday before Thanksgiving to Rep. Dave Camp, Michigan Republican and Ways and Means chairman, urging him to devote some committee time to extending federal unemployment benefits. At issue is the Emergency Unemployment Compensation (EUC) program, enacted in 2008 to offer qualifying unemployed workers benefits above and beyond what are available during normal economic times.